Pulmonary surfactant is a complex mixture of lipids and proteins that prevents collapse of the alveoli and distal airways at low lung volumes. Numerous chemical and particulate toxicants, when inhaled, affect the surfactant system. Silica dust administered by either intratracheal injection or by inhalation, causes massive increases in the surfactant content of the lungs. The mechanisms through which silica stimulates the surfactant system are not known. The pulmonary surfactant system consists of two major anatomically distinct pools, an intracellular pool contained within the alveolar Type II cells and an extracellular pool that overlies the alveolar epithelium. These pools appear to be under some kind of common regulation because the relationship between them appears to be highly stable. Intratracheal injection of silica dust increased the levels of surfactant in both compartments but not to the same degree, indicating that the ratio between the two pools could be changed by toxic materials. These data suggest the existence of a size relationship between the intra- and extra-cellular pools of surfactant, a relationship that implies a common regulatory mechanism that can be disturbed by pulmonary injury. The effects of silica on the surfactant system appears to be mediated through the alveolar Type II cells. These cells increased 2-fold in response to silica and, in addition, many of them increased in size. We have isolated these hypertrophic Type II cells and preliminary evidence indicates that the increased levels of phospholipid in the lungs of silica-treated rats may be associated primarily with the appearance of these highly active cells.